How do you work with Internal Audit?  Do you have a good relationship?  If so, why and how?  That’s this week’s question.  We’re going to be running a series here at Compliance Kristy about how we can work successfully with several functions: Internal Audit, Human Resources, Legal, Management and Procurement.  Along the way, I’m going to be asking YOU, the experts, on how you successfully work with each function.  I’m planning on taking your answers (anonymously of course) and putting them into my presentation at the SCCE Conference in Las Vegas.  (for more information on the amazing conference – click HERE).

We’ll start this off with the survey, which has only two questions: 1. How do you work with Internal Audit?  And 2. Do you have a good relationship?  To answer, please click HERE. 

As for me?  Following please find Four Wildly Successful ways I’ve found to work with Internal Audit.

1. Institute a Pre-Audit Check-In

Before I began Spark Compliance Consulting, I was Chief Compliance Officer at United International Pictures, the joint venture of Paramount Pictures and Universal Pictures for movie distribution in 65 countries. Although I travelled to an average of 16 countries each year to do in-person compliance training, I could never visit all of the countries. However, our Internal Audit team did. I asked our head of Internal Audit to have a pre-audit phone call with me whenever he went to a new country. On our call we would discuss the following:

This check-in allowed Internal Audit to be highly aware of any issues. Of course there were times when I couldn’t share information about an investigation or an unresolved conflict of interest, but when I could, it was extremely helpful as Internal Audit would keep their eyes open when they were visiting to spot problems they might not otherwise see.

2. Add Compliance Elements Into the Audit Scope

One way you can work with Internal Audit is to add a couple of compliance-related elements into the Audit scope. You may need to negotiate with Internal Audit or the finance leaders to do this, but it is well worth the negotiation. Consider adding these compliance elements into the audit scope:

3. Have a Post-Audit Catch-Up

After the audit is complete, have Internal Audit call you for an informal catch-up. Ask about the culture in the country or business unit. Were the salespeople stressed out or under unreasonable sales goals which may lead them to compromise their ethics? Is there a dictatorial style of management or bullying occurring? How was morale?

Last year the Institute of Business Ethics published a fascinating white paper on the capacity for Internal Audit to perform checks on culture. I attended the launch party for the paper in London, and much of the discussion revolved around the observation that many Internal Auditors are uncomfortable trying to quantify culture in a way that could confidently be included in an audit report. My suggestion is that you bridge this ground by giving Internal Audit space to informally report to you about the culture that they see during their audits so that you can follow up where appropriate and target training or travel to countries and business units which may have problems or issues.

4. Do Audit-Specific Training

In order to best utilize the Audit team, you should arrange special live or webinar training to help Internal Auditors to identify the red flags they are likely to see during their audits. Instead of performing generic anti-bribery training, talk to the Internal Audit team about red flags, and give them real examples of how other companies have gotten in trouble or share examples of problematic payments you’ve found at your company. The more information Internal Audit has, the better. My experience is that good Internal Auditors enjoy the hunt for improper payments, and arming them with the knowledge to find them is a fun experience that you will both enjoy.

Conclusion

Internal Audit can be your best friend. The men and women in these roles spend more time on the ground than you ever will unless you’re performing an investigation. You can leverage their time to enhance your program and create a stronger defense against illegal and unethical behavior.